Transcript Codes 971 and 846 with Different Dates - Tax Offset?

Those transcript codes tell a specific story about your return processing: • Code 971: This is a "Notice Issued" code dated 3/10/25 - meaning the IRS is sending you some type of correspondence • Code 846: This is a "Refund Issued" code dated 2/25/25 - indicating money was already sent to you The unusual part is that your refund date (846) comes BEFORE the notice date (971), which suggests: • They processed your return • They determined you're getting a refund • They issued that refund on 2/25 • They're sending a notice on 3/10 (likely explaining adjustments) Given you mentioned owing a small amount, this could indeed be an offset situation, but the timeline is somewhat atypical.

I had exactly 13 days between my 846 and 971 codes last month. Spent exactly 4 hours trying to figure out what it meant until I discovered https://taxr.ai which decoded my transcript in exactly 2 minutes. It explained that the 971 notice was being sent exactly 14 days after my refund to explain that they adjusted my refund amount by exactly $127 due to a calculation error on my education credits. Since you mentioned owing a small amount, it's 94% likely they're just sending documentation of the offset they applied to your refund. You'll have your money in exactly 3-5 business days from the 846 date.

I had this exact situation on February 12th this year. Called the IRS on February 13th and waited 2 hours and 17 minutes only to be disconnected. Tried again on February 14th with the same result. Finally used Claimyr (https://claimyr.com) on February 15th and got through to an agent in under 25 minutes. The agent confirmed exactly what I suspected - they had offset part of my refund to cover a small balance due from a previous year and were sending a notice dated March 1st to explain the adjustment. Saved me days of worry and waiting.

I had the same codes appear last month, and it's similar to when a store issues a receipt after processing your return. In my case, they took $142 that I owed from my previous tax year and then sent me the remaining refund. The notice (971) came about two weeks after the deposit, just explaining what they did. It's not like when you get audited where they freeze everything - this is more like a simple accounting adjustment they're just documenting.

This pattern on your transcript usually indicates a refund adjustment situation. The IRS is probably sending you a notice explaining why your refund amount changed from what you calculated on your return. Did you claim any credits this year? Education credits? Child tax credit? Were there any math errors you might have made on your return? Have you checked your bank account to see if the refund has already arrived since the 846 date has passed? The fact that the refund date comes before the notice date is actually a good sign - it means they're sending the money first, then explaining any adjustments after.

Based on my experience reviewing hundreds of transcripts, this is almost certainly a refund offset situation. The 846 code with a 2/25 date generally indicates that your refund was processed and likely issued around that date, though it's possible there may have been some adjustments. The 971 code dated 3/10 is, in most cases, a notice explaining those adjustments or confirming the offset. It's worth noting that the IRS typically processes refunds first, then sends explanatory notices afterward, which is consistent with your timeline. You may, depending on your specific situation, receive a partial refund with the remainder applied to your outstanding balance.

According to Internal Revenue Manual 21.4.1.3(1), the 846 code indicates a refund issuance, while 971 refers to a notice or correspondence. Per IRM 5.19.1.4.10, when you have an outstanding tax liability, the IRS is authorized under IRC § 6402(a) to offset your refund to satisfy the debt, which appears to be what happened in your case. The February 25th date on the 846 code indicates when the refund was issued (after any applicable offsets), and the March 10th date on the 971 code indicates when they'll send formal documentation of this transaction. This is standard procedure when the IRS applies refund offsets to satisfy existing tax liabilities.